Sega's flagship product of 1957, the Sega Bell.

Flyer for Sega's first original coin-op, Periscope.

Sega History by Sega World
Part 1 - the beggining + the merge

Sega claims to have been established in 1951 (and incorporated in 1960), however in reality Sega's history begins with the establishment of "Service Games", Hawaii originating in 1945 when Irving Bromberg and his son, Martin Jerome Bromberg, formed a partnership with James L. Humpertto manufacture and distribute slot machines and other coin-operated devices, primarily to US personell stationed across Asia in the years after World War II. They called the partnership Service Games (i.e military service) and based their operation in Honolulu.

Irving Bromberg, the father, brought to the young company a reputation for being an innovator in coin-machine technology; as the founder of the Irving Bromberg Co. (established in 1933), he brought some of the first vending machines to Brooklyn, Boston and Washington, D.C. He also founded a business known as Standard Games Co. in Los Angeles, California, in 1934 for the civillian market. However, he was aging and his son assumed much of the management of Service Games. Bromley and Humpert were employed in the U.S. Navy Shipyard at Pearl Harbor during World War II, and had worked together in coin-operated enterprises that called upon the technical competence of the senior Bromberg.

The United States Congress of the Gambling Devices Transportation Act of 1951 banned slot machines on military bases within the territory of the United States, forcing Service Games to look into other avenues to market and sell their products. In February 1952, Bromley sent Richard Stewart, a Service Games salesman, and Raymond Lemaire, a mechanic, to Japan to promote and expand sales of Service Games machines on U.S. military reservations.

The result, Service Games, Japan, and over the next few years, a network of factories sprung up across South East Asia to cater for American troops stationed in the Orient. Service Games also began selling its machines in Europe, becoming one of the major players in the worldwide slot machine market.

By the early 1960s a series of money-making sell-offs left only the Japanese branch of Service Games still in operation, and in May 1960 had split into two entities, Nihon Goraku Bussan (distribution) and Nihon Kikai Seizo (manufacturing). The "Service Games" brand was no longer in use, but a condensed brand name was used by the latter - "Sega", first seen paired with the successful Sega 1000jukebox.

The merge

The Korean war had seen American businessman and former Air Force officer David Rosen stationed in Japan, and having fallen in love with the country, returned in 1954 to establish Rosen Enterprises, Inc.
Originally an art exporting business Rosen's company stumbled upon a surprise hit when it began to import coin-operated instant photo booths from America, tapping into the Japanese need for photographs as proof of identity. Talks with Bromley at Nihon Goraku Bussan proved fruitful, and the two sides merged in 1965, becoming Sega Enterprises Ltd. ("Sega borrowed from the Nihon Goraku Bussan side, and "Enterprises" coming from Rosen).

As Japanese living standards began to rise, Rosen moved into the arcade business, importing electro-mechanical games from Chicago. By 1961, the American arcade industry had declined, due to stagnation and lack of innovation from Chicago manufacturers. This led to Sega producing its own electro-mechanical arcade games, with engineer Hisashi Suzuki leading development, along with assistance from other Japanese engineers at Nihon Goraku Bussan.

Soon Rosen had a presence in 200 Japanese arcades, and he sought out competitors in the interests of merging. Talks with Bromley at Nihon Goraku Bussan proved fruitful, and the two sides became Sega Enterprises Ltd. in 1965 ("Sega" borrowed from the Nihon Goraku Bussan side, and "Enterprises" coming from Rosen).

Equipped with brand recognition, strong distribution channels and a large arcade presence, Sega's import business boomed, and soon found itself producing its own games, starting with the 1966 smash hit, Periscope.

To be continued...